What is Your End-Game? The Realities of Selling Your Agency
Many founders imagine a clean, celebratory exit to a holding company or a competitor. However, external sales often trigger staff panic and client nervousness, potentially hollowing out the very value you've spent years building. Jonathan Leafe, Managing Director of Leafe Consultancy, argues that for most agencies, the strongest and safest exit is an internal transition.
The Power of Internal Exits
Internal exits preserve culture, maintain continuity, and stabilize value. Jonathan highlights two primary routes:
Employee Ownership Trust (EOT): Ownership transfers to the employees. This model is gaining massive momentum due to its ability to preserve company culture and, in the UK, significant tax incentives like 0% Capital Gains Tax.
Management Buy-Out (MBO): Equity is transferred to a few key senior leaders already inside the agency. This is ideal when the agency’s value sits heavily in a specific leadership team. Jonathan shares his own experience of a 10-year MBO plan that resulted in a thriving legacy.
The Hidden Danger: Your Pension
A critical piece of advice Jonathan offers is to never rely solely on the proceeds of a sale to fund your future. Agency revenue is volatile; retainers can vanish, and buy-out payments can stall.
"Never let the volatile, project-based revenue of your agency be your only pension."
Planning for the Long Term
Succession isn't a one-year project; it is a five-to-ten-year journey. To prepare, you must:
Identify Successors Early: Who will lead the agency after you?
Train for Leadership: Help them become leaders long before they become owners.
Build Personal Reserves: Create a financial safety net outside of the business.
The best exit is one that allows your agency to thrive long after you step away, protected by the people who helped you build it.
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